Cutting Public-Sector Wages Will Deepen Recession

The Alberta Federation of Labour today urged Premier Stelmach to learn the lessons of the past and abandon any efforts he might be considering to re-open public-sector contracts to reduce wages or benefits.

"We are talking about more than 100,000 workers who work hard for decent, ordinary wages," says AFL President Gil McGowan. "If the Premier forces wage reductions on them, it will deepen the economic crisis we are in."

McGowan points out that the bulk of public-sector workers earn average salaries which, like most Albertans, go to pay bills, feed families and keep local economies running. "Stripping a portion of their salary away will mean thousands of Albertans will have less money to spend on necessities, which will mean less consumer spending resulting in a worsening recession."

"There is a big difference between retracting some bonuses to a handful of senior managers and cutting into the basic pay of thousands of front-line workers."

McGowan also points to history as an argument against cutting public-sector wages. "In 1993, Ralph Klein forced all public-sector workers to take a 5% wage roll back," remembers McGowan. "The direct consequence of that decision was reduced wages for all workers, including the private sector."

"In 1994/95, Alberta was the only province in Canada to record an actual drop in average wages. By imposing wage roll backs in the public sector, the Klein government gave the green light to employers in the private sector to follow suit. The result was that wages dropped across the board, in all industries and sectors."

"That is the last thing Albertans need right now as we struggle with this recession."